The annual Competitive Carrier Report 2006, 20th Edition, published by New Paradigm Resources Group Inc. (NPRG, Booth 600), forecasts another year of brass-knuckle market combat as the competitive local telecom industry enters its 10th year under the Telecom Act and the winners will be companies that fight smart, not just hard, according to NPRG.
NPRG President Terry Barnich said, The effects of intense competition, regulatory change and the SBC/AT&T and Verizon/MCI mergers will force competitors to scramble or merge for survival. But the competitive market is here to stay, and will be spurred by technology strategies that span VoIP and broadband wireless, and will fuel the next generation of operators.
NPRGs Competitive Carrier Report 2006 provides detailed analysis of 51 competitive carriers, including traditional providers as well as those transitioning to softswitches. The report presents a comprehensive list of all the markets where competitive carriers are active, and provides detailed breakdowns on revenue and facilities.
The market has become extremely competitive, which is exactly what Congress wanted to happen, said Craig Clausen, NPRG senior vice president. Though competition and consolidation are shrinking the market, the survivors will be stronger companies. The incumbents themselves will boost competition as they increase investment in local infrastructure to go head-to- head for business customers.
Among the key findings of this years report:
UNE-P Forces Change
UNE-P deregulation is having a major impact on competitive carriers, forcing operators to consider lower-margin leasing arrangements, facilities deployment, or even to drop services.
VoIP Goes Mainstream
In response to UNE-P change, many competitors are migrating to VoIP softswitching to provide voice services, benefiting from the reduced costs associated with VoIP facilities versus circuit switches.
Wireless Options Make a Comeback
Advances in local multipoint distribution systems have made fixed wireless less expensive and more sophisticated, reviving the interest of competitive carriers in a wireless last-mile option once thought dead. Similarly, the evolution of Wi-Fi and WiMAX broadband wireless is opening up new, low-cost alternatives versus wireline connectivity.
Pricing Pressures Offer Surprise Benefits
While retail and wholesale prices continue to place pressure on operators top lines, competitors also are benefiting from the decline in T-1 and T-3 prices from wholesalers, using T-1s to offer higher-margin integrated services.
Revenue Down, Access Lines Up
Revenue growth, which peaked in 2004 at $33.53 billion, will decline slightly for the next several years to roughly $32.6 billion in 2009. Competitive carriers access lines, however, continued an upward trend, rising 10.5 percent from 37 million lines in 2004 to nearly 41 million lines in 2005.
Capital Expenditures Decline, Softswitch and OSS Sales Show Promise
Capex continued to decline, from $2.1 billion in 2004 to $1.9 billion in 2005, and likely will fall to $1.75 billion in 2006. Exceptions to the trend will be investments in softswitches and OSS software, to reduce carriers operating costs.
The Competitive Carrier Report 2006 in hardcopy or CD-ROM format is available from NPRG for $4,250 (additional copies are $2,100). Contact Rochelle Barnich at +1 312 980 7823 or firstname.lastname@example.org.